• West Africa produces about 70% of the world’s cocoa, with roughly two-thirds of regional exports destined for the EU.
• Industry experts warn that more than half of Nigeria’s cocoa farmers could struggle to meet new EU deforestation requirements.
• Exporters are spending up to $80 per metric ton on mapping and traceability, while European buyers resist absorbing compliance costs.

Cocoa farmers across West Africa are racing to document exactly where their beans are grown as the European Union prepares to enforce its deforestation rules.

For farmers such as Ojo Ayaninuola in southwestern Nigeria, the process has brought an unfamiliar requirement: allowing exporters to geolocate and digitally map individual farms.

Ayaninuola initially resisted. He changed course after Sunbeth Global, the exporter that buys his entire crop, warned that non-compliance could close access to the European market.

The stakes stretch far beyond individual farms. The EU buys about 60% of the world’s cocoa. West Africa produces roughly 70% of global supply and sends about two-thirds of its beans to the bloc.

Industry experts now fear that gaps in traceability could disrupt those established trade flows.

“There’s a distinct possibility that in the early days of the law, EU importers won’t be able to get enough compliant cocoa from indirect or third party shippers from origins like Nigeria, from Ivory Coast, from anywhere,” said sustainability consultant Nicko Debenham, a former global cocoa trader.

Smallholders face a major compliance test

Nigeria has about 300,000 cocoa farmers, most operating on a small scale. Industry estimates suggest farmers producing more than half the country’s cocoa may struggle to meet the new rules.

Similar challenges are emerging in Ivory Coast and Ghana.

The EU Deforestation Regulation requires companies selling covered commodities into the bloc to prove they were not produced on recently deforested land. Importers must trace commodities back to the plots where they were grown.

They must also show that production complied with laws in the country of origin.

For cocoa, that means exporters need detailed farm maps, land-use verification and digital traceability records across complex supply chains.

That is particularly difficult in West Africa. Cocoa frequently moves through several intermediaries before reaching exporters or processors.

In Ivory Coast, only around half of cocoa production can be traced to its farm of origin, according to a study by non-profit Trase released in May.

The remainder often travels through indirect supply chains where intermediaries can make farm-level verification harder.

RELATED ARTICLE: EU Removes Leather From Deforestation Law After Industry Pressure

Compliance costs are hitting exporter margins

Companies with the resources to build traceability systems are spending heavily.

Sunbeth Global said it has mapped 124,000 hectares of farmland across southern Nigeria over the past three years. Those farms account for about 60,000 metric tons of cocoa in its supply chain.

The mapping has cost between $30 and $70 per metric ton.

Sunbeth has also deployed hundreds of field agents to train farmers on Nigerian legal requirements, including rules against child and forced labour. It employs a 35-person sustainability team and works with Amsterdam-based data verification company Meridia.

“It is expensive to do this… (and) in early conversations with ⁠our offtakers, there has been some pushback over who will bear the cost of EUDR compliance,” Sunbeth Chief Operating Officer Nzubechukwu Anisiobi told Reuters. The cost-benefit analysis right now is eating into our margins.

Starlink Global and Ideal, Nigeria’s largest cocoa exporter, faces similar pressures. The company ships about 60,000 tons annually and said it has spent $40 to $80 per ton on mapping and traceability since 2023.

Those costs have yet to be recovered from European buyers.

Cocoa buyers face supply and pricing risks

The commercial impact could extend quickly into European chocolate supply chains.

Debenham expects shortages of compliant cocoa could persist for about two years. Exporters that have already invested in traceability could therefore gain greater negotiating power and potentially command premiums.

For manufacturers, the regulation creates a sourcing challenge alongside the environmental objective.

Companies may need to reconsider supplier concentration, traceability systems and procurement contracts as compliance becomes part of cocoa pricing.

For West African governments, the pressure is equally significant. Cocoa remains a major export industry and a source of income for hundreds of thousands of rural households.

The EUDR is therefore becoming more than a European environmental regulation. It is reshaping how one of the world’s most important agricultural commodities is documented, financed and traded.

Whether West Africa can close its traceability gaps will help determine both the cost of chocolate in Europe and how effectively global commodity markets can separate agricultural production from deforestation.